Pensioners big winners in $10.4b stimulus splurge

Australia's 4 million pensioners are set to receive almost $5 billion in payments before Christmas in a new economic stimulus plan announced by Prime Minister Kevin Rudd today.

Low income families and first-time homebuyers are also set for benefits under the $10.4 billion plan, which the Government hopes will protect Australia's economy from slowing growth as the global economic crisis continues.

Single aged pensioners will receive a payment of $1,400, with couples receiving $2,100.

Families who are eligible for Family Tax Benefit A will be paid $1,000 for each child, as will those who have dependent children on other benefits such as youth allowance.

Mr Rudd says almost 4 million children will receive the payment.

Disabilitiy pensioners are also eligible for the $1,000 payment as are carers.

The payments will be made on December 8.

Prime Minister Kevin Rudd says the spending, to be taken out of the $22 billion Budget surplus, is necessary to boost positive economic growth and stave off the effects of the global credit crunch.

"The global financial crisis has entered into a new, dangerous and damaging phase," he said. "That's why the Government has decided to act decisively and early."

The first homebuyers grant will be doubled in the 2008-09 year from $7,000 to $14,000 for those who buy their first home, and tripled to $21,000 for those who buy a new home, at a total cost of $1.5 billion.

Mr Rudd says a good performance in the housing sector is critical for the economy's overall performance.

"The Government remains determined to take whatever action remains necessary in the future, firstly, to continue to maintain the stability of the Australian financial system, and secondly to continue to underpin positive economic growth in the economy going forward," he said.

In other measures, $187 million will be spent on doubling training places.

The Government will also continue to fast-track infrastructure spending, but Mr Rudd said further details on which projects will be listed as a priority will be made in December.

Treasurer Wayne Swan, who has just returned from meetings with G20 leaders in the US, says the measures were necessary as global economic conditions changed dramatically in just a few weeks.

"The sooner that governments act to protect their people, the better," he said. "The situation is moving very fast, and it does require decisive action."

However Mr Swan also said Australia's economy still remained in a strong position.

Opposition Leader Malcolm Turnbull says he will seek a briefing from the Government on the package but has welcomed it and says it has bipartisan support.

"It will provide a stimulus to the economy and above all it give justice to Australia's aged pensioners in particular who have been doing it especially tough," he said.

"We trust that the Government has taken into account the advice from Treasury and considered the impact that this stimulus may have on the Reserve Bank's ability to continue reducing interest rates.

"Nonetheless we're not going to argue about the composition of the package."